Economy Financial News

Federal Reserve is set to reduce U.S. short-term borrowing costs on Wednesday, marking a significant shift after more than two years of battling high inflation. The central bank is expected to lower its key rate by either a quarter-point to 5.00%-5.25% or a half-point to 4.75%-5.00%, following a series of hikes that totaled 5.25 percentage points since March 2022. While the initial cut could be modest, the Fed is likely to continue lowering rates, aiming for a range between 4% and 4.5% by the end of the year, with more reductions planned for 2025. However, policymakers have indicated that rates will not return to the sub-2% levels seen prior to 2022, meaning the low mortgage rates of the past are unlikely to come back soon. Despite these cuts, inflation has cooled significantly, and average paychecks are now rising faster than prices. However, the high cost of goods, like groceries, continues to strain household budgets.

Subscribe to enjoy similar stories. The Federal Reserve’s expected rate cut Wednesday will sound the all-clear for overseas central banks that are also concerned about their domestic economic growth. Some of the world’s most consequential central banks, including those in the eurozone, the U.K.

food inflation, State Bank of India (SBI) chairman C S Setty has said. The US Federal Reserve's first cut in interest rates in more than four years is expected soon, triggering central banks in other economies to follow suit. «On the rate front, a lot of central banks are taking independent calls. While Fed rate cut would influence everyone, RBI would be mindful of the food inflation before taking a call on interest rate cut,» Setty, who took over the reins of the bank recently, told PTI in an interview. «That is what our view is, and our view is also that the rate cut during the current calendar year may not happen, probably we may have to wait for Q4 (January-March 2025) unless there is a good improvement in terms of food inflation,» he said.

Manish Singh, Market Expert, says the reason the Fed is going to cut by 50 bps and why it should cut 50 bps is that if the inflation is on track to be at 2%, (it is at 2.5% now), what justifies the rates being this restrictive, as we have seen the most rapid increase in rates in the last 40 years. The rates have been at 5.25% for 14 months. What justifies it being at this high restrictive level? There is no point. So, for that reason you are going to get 50 basis point cut. While most analysts were holding the view that the American economy is fine, there is no recession right now or even on the horizon, a soft landing with a 25 basis point cut was turning up to be the consensus view. But now things have slightly changed in the run-up to the FOMC meet. Have not they? A 50 basis point rate cut does not seem completely unlikely. Manish Singh: No, it is not unlikely and we are going to get that and it is justified. Because if you look at where the two-year rate is, the two-year treasury yield is at 3.57% and the upper bound of the Fed fund rate is 5.5%, so we are talking about 190 basis point spread. You have to go back to 2008 to see the spread this wide.

Determined to thwart the automating of their jobs, about 45,000 dockworkers along the U.S. East and Gulf Coasts are threatening to strike on Oct. 1, a move that would shut down ports that handle about half the nation’s cargo from ships

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Asian shares are mostly higher as investors focus on prospects for the U.S. Federal Reserve’s first cut to interest rates in more than four years

Smaller Southeast Asian markets may continue to do better than larger ones, while a significant rise in the yen might cause volatility in the Japanese market and high-performing chip stocks. Fear of an unwind in the yen carry trade has the potential to hit markets globally.

«Because there is growth slowdown and I have been in India for the last couple of days and there are visible signs of slowdown, whether it is real estate in northern India or consumption part of the economy,» says Rahul Chadha, Shikhara Investment. What is it that you are making of the market right now? I mean, all the valuation concerns aside, markets and not just us, globally, they do not want to stop. Rahul Chadha: I think what markets are looking is what Fed would do tomorrow. So, September 18th is when Fed comes for a meet and clearly, we are seeing globally economic data being soft but the hope is that policymakers, particularly here, the central banks come quickly, act quickly, and cut rates quickly, so which is where 50 bps cut from Fed would be reassuring and we have had some statements from the Fed members saying that Fed should go to neutral rates very quickly.

Asian stocks rose before a Federal Reserve policy decision, with traders still split on the size of an anticipated interest-rate cut. Japanese shares led regional gains as the yen’s slide on Tuesday boosted the outlook for the nation’s exporters. The dollar bounced in New York following stronger-than-expected retail-sales data. Hong Kong is shut for a holiday, while Chinese stocks listed on mainland markets will resume trading after a break.

U.S. stocks drifted to a mixed close near their all-time highs ahead of a highly anticipated meeting of the Federal Reserve

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Donald Trump is currently a leading favorite to win the US elections but there are severe concerns on what the condition of the US economy could end up to be if he comes to power. Trump's promises around tax cuts, tariffs and immigration could lead to serious inflation, feel economists, and if things take a turn for the worse after the elections, it could hurt the US economy so badly, that it could take an entire administration period to mitigate the damages.

For all the hype that goes into them, Federal Reserve meetings are usually pretty predictable affairs. Policymakers telegraph their intentions ahead of time, markets react, and everyone has at least a general idea of what's going to happen.

Fed rate cut is directly targeted at battling the inflation levels in the United States, and also halt the recession in its tracks, but there is still some more insight needed as to how much the move will affect the markets beyond the US. There are chances that the global markets will resonate the impact of the Fed rate cut, and countries like China, which exports heavily to the United States, could be among the ones most affected by the call.

Latinas are making substantial contributions to the U.S. economy.

As soon as word of the demand diminishing hit the markets, stock prices of the company dropped by nearly 2.8%, as per The Telegraph's report. Moreover, the pre-order count for iPhone 16 is also way less than its predecessor, almost 12.7% lower, which is one of the other reasons for the stock prices dipping in this scenario. Also Read: Silver lining for the ex-president: economy and immigration; that's where Donald Trump scores against Kamala Harris

Donald Trump might have a bright spot. Numerous polls since the candidates' Tuesday meeting in Philadelphia have shown Harris to be just ahead of Trump. Trump still has the advantage when it comes to voters' trust in his ability to handle immigration and the economy. These two issues that voters have repeatedly stated are their top concerns in this year's election, even though Harris has seen a slight increase in support. Although polls released over the past week may not fully reflect the impact of the debate and issues like Trump's second alleged assassination attempt, they generally indicate a slight to moderate improvement for Harris. Also Read :One way ticket: Either Kamala bubble will burst or Trump voters get demotivated and don't show up, says Peter Thiel

Americans spent a bit more at retailers last month, providing a small boost to the economy just as the Federal Reserve considers how much to cut its key interest rate

Donald Trump was asked a series of questions pertaining to his vision of cryptocurrency and its impact in the US and global economy, the former US President was seen faltering multiple times, and appeared to be trying to deviate from the topic, as per a report by Daily Express US.

Jordan’s King Abdullah II has tapped a longtime aide to serve as the kingdom’s new prime minister